Large could head new Lloyd's regulatory body

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The Independent Online
ANDREW LARGE, chairman of the Securities and Investments Board, the City's main investment regulator, could emerge as chairman of a new regulatory body being set up within the troubled Lloyd's insurance market.

Mr Large succeeded Sir David Walker as a member of the ruling council of Lloyd's when Sir David retired as chairman of SIB at the end of May. Under Lloyd's present procedures, the head of SIB or his deputy has a guaranteed place on the council as a lay member.

If Mr Large were to take up the job, it would be seen by those inside Lloyd's as an attempt by the Bank of England to bring Lloyd's more in line with conventional financial supervision.

At present, Lloyd's is allowed to regulate its own affairs, and many underwriting members facing the largest share of pounds 2bn losses have argued that Lloyd's should be brought within the ambit of the Financial Services Act and SIB.

Mr Large is described as a 'nominated' member of the council. His appointment, along with seven other lay members, receives the approval of the Governor of the Bank of England.

Last month, Sir Jeremy Morse, chairman of Lloyds Bank and also a member of the Lloyd's council, put forward a range of constitutional reforms for the market.

He recommended that the size of the present ruling council should be reduced to 14 from its present 28, and that the council should delegate many of its powers to two new bodies: a market board responsible for developing Lloyd's business, and a regulatory body to police the market.

Sir Jeremy proposed that the regulatory board should be chaired by one of the Bank of England-approved appointments to the council. He further suggested that the chairman of the regulatory board should have the courtesy title of deputy chairman of Lloyd's.

The regulatory board would include four nominated members of the council, including the chairman of the board, four external Lloyd's members and four professional brokers or underwriters.

Sir Jeremy's proposed changes represent the biggest constitutional upheaval in the market in modern times.

Lloyd's is struggling to develop transitional arrangements to reduce the size of its council quickly and make the changes Sir Jeremy has urged.

David Coleridge, the present chairman, who is not planning to seek re-election at the end of this year, is understood to have urged other members to consider their positions and take the opportunity to resign if they wish.